Guide to debt consolidation: simple steps to consolidate debt Word Count: 737 Summary: Debt consolidation accompanied by proper money management is a responsible way to get and stay out of debt. Educating yourself about how to get out of debt legally is a vital first step in your journey to manage your debt, more effortlessly. It will not only help you avoid the many debt consolidation scams out there but will surely help you in choosing the most appropriate plan for your situation. Keywords: UK debt consolidation loan,debt management,debt advice,debt consolidation Article Body: A Debt consolidation loan is a loan used to repay several other loans. It is a single, low cost, secured loan. A UK Debt Consolidation Loan is a low cost loan secured on your UK home. It frees up the spare capital (or equity) in your home to repay your store card and other debts. The loan may have been taken due to debts incurred through personal loans, credit cards, overdrafts, or may represent any number of unpaid bills that have built up over time. Debt Consolidation Loan rates are variable, depending on status. Monthly repayments will depend on the amount borrowed and the term. These loans can give you a fresh start, allowing you to consolidate all of your loans into one - giving you one easy to manage payment, and in most cases, at a lower rate of interest. It can reduce both your interest costs and your monthly repayments, putting you back in control of your life. Average household debt in UK is £44857 including mortgage and £7,694 excluding mortgage. UK has seen a rapid increase in household debts, which means that more than half of the people have trouble meeting their monthly payments, and are being driven further and further into debt. With an average family having 14 credit cards, and various other debts – debt consolidation seems only logical. Debt consolidation and settlement solutions are practical means for eliminating credit card and other high interest debts, and getting your financial health and future back on track. Being concerned about debt elimination 24hrs a day can be extremely stressful, both on you and your family. So take a few minutes right now and educate yourself about your options. 1. Go with a company that has a good reputation. Don’t assume that every non-profit company is necessarily going to look out for your interests more than a for profit debt consolidation company. Shopping around will give you the means to decide on the one that best suits your circumstances and budget. Spend time researching different lenders and get quote from a handful before deciding on whom to take your debt consolidation loan from. 2. Do the math yourself. Take the time to work through the expenses yourself and see how much you will be paying, how long it will take to pay off the loan, etc. Too many people keen to consolidate their debts, take the first opportunity available to them, unaware that there are lower rates and other options available. 3. You must consider whether debt consolidation is cost effective in the long term. Paying off an existing debt may incur charges for early settlement, and there may also be a fee for arranging your consolidation loan. 4. Also, by taking out a new loan, you will be extending the period in which you are paying off debts - and that might mean a greater interest cost in the long run. Finally, many lenders add payment protection insurance to their loans without the borrowers’ knowledge, which is often more expensive than similar cover freely available elsewhere. 5. Make sure you understand the difference between variable and fixed rate loans. If you sign up for a variable rate loan, you may get a lower rate initially, but within a few years it may go up. 6. Debt consolidation with debt counseling can provide you with debt advice for financial planning. This would help you sort out your present debts as well as prevent you from getting into future debt. Debt counseling services can talk to your creditors about reducing interest rate, eliminating late fees and extending loan term. For debt elimination, search a debt counseling agency that is the member of National Foundation for Credit Counseling (NFCC) or the Association of Independent Consumer Credit Counseling Agencies (AICCCA). Secured on your UK home, low cost, low rate, cheap, low interest debt consolidation loans can sweep away the pile of repayments to your credit and store cards, HP, loans and replace them with one, low cost, monthly payment – one calculated to be well within your means. It has been found that a significant number of UK residents are not aware of the benefits of the debt consolidation options and are suspicious about how it works. There is a need to increase the awareness of the debt consolidation solutions and evolve new varieties and features for debt consolidation solutions. There is a great potential to increase the benefits of debt consolidation solutions.